General
Utilization of Bank Overdraft
Recording a negative bank balance when a company uses its credit facility for payments.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Payable / Expense | Mixed | 1,000.00 | - |
| Bank Overdraft Payable | Liability (+) | - | 1,000.00 |
💡 Accountant's Note
If your bank balance goes below zero, the 'Cash' asset doesn't become a negative asset—it becomes a 'Current Liability' called Bank Overdraft.
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